Income Statement Items:

Sales 3,250,000

Cost of goods sold 1,750,000

Loss on sale of equipment 90,000

Operating expenses (including depreciation of 120,000) 800,000

Selling expenses 200,000

Dividend income 100,000

Interest income 50,000

Gain on sale of vehicle 80,000

Interest expense 110,000

Income tax expense 130,000

Balance Sheet Items:

end of the year beginning of the year

Accounts Receivable 650,000 700,000

Accrued Interest Receivable 10,000 7,000

Prepayments 30,000 -

Office Supplies 8,000 -

Inventories 820,000 730,000

Short term prepayments 20,000 15,000

Accounts Payable 540,000 562,000

Accrued Operating Expense 65,000 90,000

Accrued Interest Payable 21,000 15,000

Accrued Income Tax Payable 18,000 32,000

1. Prepare Income statement in proper form (1)
2. Prepare cash flows from operating activities using direct method. Show supporting computations for the following: (1*7)

1. Cash received from customers.
2. Interest received
3. Dividend received
4. Cash paid to suppliers
5. Cash paid to employees.
6. Interest paid
7. Income tax paid